Iceland's Kilometre Road Charge
Since 1 January 2026 every vehicle in Iceland pays for each kilometre it drives. The charge is called kílómetragjald, it applies whatever the car runs on, and there is no exemption for visitors. If you hire a car you will pay it, it will not be inside the price you were quoted, and both of the big operators we checked add a fee of their own on top of the government rate. This page sets out what the state charges, what the rental firms charge, and what it actually comes to on a trip.
What Changed, And What It Replaced
This was a swap, not an addition. On the day the kilometre charge began, three fuel duties were abolished outright under the same Act:
- Vörugjald af bensíni - the petrol excise duty
- Sérstakt vörugjald af eldsneyti - the special fuel excise duties
- Olíugjald - the diesel oil duty
What survived is Kolefnisgjald, the carbon charge, which stayed and was reset at these rates: petrol at 24.25 ISK per litre, and diesel and gas oil at 28.3 ISK per litre. So road tax moved from the pump to the odometer. How far pump prices actually fell is harder to pin down than the duty change itself, and we would rather attribute than assert: Höldur publishes a fall of roughly 94 ISK per litre on petrol and 87 ISK on diesel; Hertz says only that pump prices will be "generally lower" and names no figure.
The Rate
The charge steps up with the vehicle's permitted total weight. Almost every rental car, and most small campervans, sit in the first band.
| Permitted total weight | ISK per km | |
|---|---|---|
| 0 - 3,500 kg | 6.95 | Ordinary cars and 4x4s - almost every rental car and most small campervans |
| 3,501 - 5,000 kg | 9.85 | Larger motorhomes and small vans start here |
| 5,001 - 6,000 kg | 10.44 | |
| 6,001 - 7,000 kg | 11.06 | |
| 7,001 - 8,000 kg | 11.73 | |
| 8,001 - 9,000 kg | 12.43 | |
| 9,001 - 10,000 kg | 13.18 | Rates continue upward for vehicles over 10 tonnes |
What Your Rental Company Charges
The charge falls on the vehicle, so the rental company pays the state and bills you. Both operators below add a fee of their own for doing so, and both publish it - which is more than most. Note that the government charge itself carries no VAT when it is passed on separately and without a mark-up, but an operator's handling fee is not exempt, which is why these are quoted twice.
| Operator | Government rate | Their fee | Total per km | How and when |
|---|---|---|---|---|
| Höldur (Europcar) page dated 29 December 2025 | 6.95 ISK | Administration fee, published as 1.50 ISK plus VAT, or 1.86 ISK including it | 8.81 ISK | Per kilometre, from the odometer reading at pick-up against the reading at return. Charged to the card on file by pre-authorisation when the contract is closed; the hold can take up to five business days to release. |
| Hertz Iceland page dated 22 December 2025 | 6.95 ISK | Service fee, published as 1.40 ISK plus VAT | 8.69 ISK | Per kilometre, against reported odometer readings. Shown on the rental agreement at pick-up and again on the final invoice after drop-off. |
Neither includes it in the quoted rental price, and both say so plainly. Höldur puts a pre-authorisation on the card when the contract closes; Hertz shows it on the rental agreement at pick-up and again on the final invoice. Expect it to appear after you have handed the car back.
The Flat Day Rate Nobody Is Using
There is a second way to pay this, and it is worth knowing about even though you cannot choose it. A rental company may register its short-term hire cars on a flat rate of 1,390 ISK for each day of hire instead of metering them. Where a firm takes that option, the day rate is the final assessment: actual mileage is not taken into account at all. The figure is benchmarked to 200 km a day, so it favours anyone driving more than that - which is most people on a Ring Road trip.
| How it is paid | Working | Over the trip |
|---|---|---|
| Flat day rate, 10 hire days | 1,390 ISK × 10 | 13,900 ISK |
| Government charge only | 6.95 ISK × 2,320 km | 16,124 ISK |
| As billed by Höldur (Europcar) | 8.81 ISK × 2,320 km | 20,439 ISK |
| As billed by Hertz Iceland | 8.69 ISK × 2,320 km | 20,161 ISK |
On that itinerary the flat day rate would cost about 6,539 ISK less than the dearest metered bill - and it is even below the bare government charge, because the trip averages well over 200 km a day. Neither Höldur nor Hertz publishes the day rate, and both describe a per-kilometre method instead. We are not going to guess why, and we cannot tell you which basis a given firm uses without asking - but it is a fair question to put to a rental desk, and on a high-mileage trip the answer is worth several thousand krónur.
The conditions on the day rate, for completeness: the vehicle is owned by a rental company holding an operating licence from Samgöngustofa, it weighs 3.5 tonnes or less, it is hired out for no more than 30 days at a time, and it is not hired to a related party - a spouse, child or close relative.
Bringing Your Own Car On The Ferry
Arrive on the Norræna at Seyðisfjörður with your own vehicle and the rules are different again: a flat charge by length of stay, paid on or before arrival, with your odometer registered both coming and going. Customs contacts importers who have booked vehicle transport with instructions.
| Length of stay | Car up to 3.5 t | Motorcycle up to 400 kg |
|---|---|---|
| 10 days or fewer | 13,900 ISK | 8,300 ISK |
| 11 to 20 days | 20,850 ISK | 12,450 ISK |
| 21 days or more | 24,325 ISK | 14,525 ISK |
Stays of 30 days or fewer - the flat charge settles it, whatever the mileage. Over 30 continuous days, the charge is settled by actual distance on departure. Anything already paid on arrival is deducted, and the total can never fall below the 21-day flat rate. The per-kilometre rate for a longer stay is 6.95 ISK for a car and 4.15 ISK for a motorcycle. One transitional detail worth knowing: foreign vehicles that arrived before 1 January 2026 are exempt on departure - except battery-electric, plug-in hybrid and hydrogen cars, which are not.
Worth noticing that the ten-day flat charge for your own car, 13,900 ISK, is exactly ten times the rental day rate. The two schemes are set to the same number.
Who Pays Nothing
The exemption list is short, and no part of it applies to a visitor:
- Vehicles belonging to volunteer rescue squads, where they are specially marked and used only for that purpose
- Vehicles first registered on or before 1 January 1965 that have never had an odometer, cannot have one fitted, or cannot have one repaired
- Vehicles of foreign embassies, marked as such in the vehicle register or carrying the appropriate plates
The charge otherwise falls on every vehicle subject to registration and inspection - motorised, built mainly to carry people or goods, over 400 kg unladen excluding batteries if electric, and designed to exceed 30 km/h. Electric cars are not exempt - they were the first vehicles Iceland metered, from 2024, precisely because they bought no fuel and so paid no fuel duty. Going universal raised their rate too: in 2025 a battery-electric or hydrogen car paid 6 ISK per kilometre and a plug-in hybrid just 2 ISK. Both now pay 6.95 ISK, which is a modest rise for one and more than triple for the other.
What It Does Not Cover
- Tunnel tolls, including Vaðlaheiðargöng
- Parking charges
- Entrance and facility fees at attractions
- Traffic fines
- Fuel itself, and the carbon charge inside the pump price
The tunnel toll is the one that catches people out, because it feels like the same kind of thing. It is not: Vaðlaheiðargöng on the Ring Road near Akureyri is billed separately and has to be settled within three hours of driving through.
Frequently Asked Questions
Do Tourists Have To Pay Iceland's Kilometre Road Charge?
Yes, and there is no exemption for visitors. The charge falls on the vehicle, so if you hire a car the rental company pays it to the state and bills you. It is not included in the rental price you were quoted: both Höldur and Hertz publish it as a separate line, added per kilometre driven and settled at the end of the rental. If you bring your own car on the ferry, you pay a flat charge on arrival instead, based on how long you are staying.
How Much Is The Kilometre Charge In Iceland?
The government rate is 6.95 ISK per kilometre for cars and 4x4s up to 3,500 kg, which covers almost every rental car. It rises in steps with weight: 9.85 ISK from 3,501 kg, and on up to 13.18 ISK between 9,001 and 10,000 kg. What you actually pay is higher, because rental companies add a fee of their own - Höldur charges 8.81 ISK per km all in, and Hertz charges 8.69 ISK per km all in.
What Does The Road Charge Cost On A Ring Road Trip?
The Ring Road itself is 1,309.7 km, which is about 9,102 ISK at the government rate. Nobody drives only the Ring Road, though. A typical 10-day loop with the usual detours runs about 2,320 km, which is roughly 16,124 ISK in government charge and 20,161-20,439 ISK once an operator fee is added - 20,161 at Hertz's rate, 20,439 at Höldur's. Budget somewhere around 20,000 ISK for a ten-day trip and you will not be far out.
Is There A Daily Cap On The Icelandic Road Charge?
There is an option in law, but it is the rental company's to take, not yours. A firm may register short-term hire cars on a flat day rate of 1,390 ISK per rental day instead of metering them, and where it does, that is the final assessment - actual mileage is not taken into account. The rate is benchmarked to 200 km a day, so it favours anyone driving more than that, which describes most Ring Road trips. Neither Höldur nor Hertz publishes the day rate; both bill by the kilometre. Over a 2,320 km trip the day rate would come to 13,900 ISK against 20,161-20,439 ISK metered - a difference of up to 6,539 ISK in its favour.
Did Fuel Get Cheaper When The Road Charge Started?
The fuel duties did not fall - they were abolished outright. The petrol excise duty, the special fuel excise duties and the diesel oil duty all ceased on 1 January 2026 under the same Act that created the kilometre charge. What remained is the carbon charge, kolefnisgjald, reset at 24.25 ISK per litre on petrol and 28.3 ISK on diesel. So the tax moved from the pump to the odometer rather than being added on top. Höldur publishes a fall of roughly 94 ISK per litre on petrol and 87 ISK on diesel; Hertz says only that pump prices will be "generally lower" and names no figure.
What If I Bring My Own Car To Iceland On The Ferry?
You pay a flat charge rather than a metered one, and you pay it on or before arrival. For a car up to 3.5 tonnes it is 13,900 ISK for ten days or fewer, 20,850 ISK for eleven to twenty, and 24,325 ISK for twenty-one days or more. For stays of 30 days or fewer that flat charge settles it whatever you drive. Beyond 30 continuous days you pay by actual distance on departure at 6.95 ISK per kilometre, less what you already paid, and the total can never fall below the 21-day flat rate. Your odometer is registered both on arrival and on departure.
Does The Road Charge Cover Tolls And Parking?
No. It buys nothing but road use. Tunnel tolls are separate - Vaðlaheiðargöng on the Ring Road near Akureyri still has to be paid within three hours of passing through - and so are parking charges, attraction and facility fees, and any fines. The charge is also entirely separate from fuel, which still carries the carbon charge in its pump price.
Sources
The rates, weight bands, exemptions and temporary-import rules come from Skatturinn, published via Ísland.is: the main kílómetragjald page, the rate table for vehicles under 10 tonnes, the rental-car day rate and the rules for vehicles temporarily in Iceland. The abolition of the fuel duties and the retained carbon charge are from Skatturinn's notice of tariff changes taking effect 1 January 2026, which cites articles 29-30 of the Act on the kilometre charge. All read on 8 August 2026. Operator figures are from Höldur (Europcar) (page dated 29 December 2025) and Hertz Iceland (page dated 22 December 2025). Every government source here is an Icelandic-language page, which is a large part of why this one exists.
Related Guides
The charge is one line in a bigger bill: see renting a car in Iceland for the rest of it, car rental companies compared for how ten operators differ on their published contracts, and driving the Ring Road for the distances the charge is applied to. Electric drivers should also read driving an electric car in Iceland, since EVs lost the advantage they had before 2024 and now pay the same rate as everything else.
Last updated: 2026-08-08 · Reviewed against official sources.